The fungus was found in restricted access laboratories and greenhouses on university grounds earlier this month, but the Ministry for Primary Industries (MPI) says does not yet know how it escaped the tighter security.

It believes the environmental threat is very low.

The genetic modification involved adding marker genes to indicate the fungus' presence in research plants.

"At this stage, we believe it is unlikely any potentially genetically modified Beauveria bassiana fungus has spread further," said MPI's Roger Smith.

All samples and plant materials known to contain the modified fungus have been secured. MPI was now checking if any other material may have been inadvertently exposed to the fungus.

Lincoln University assistant vice-chancellor Stefanie Rixecker says researchers had believed they were working with a wild fungus, before it was discovered it had a genetic marker attached to it.

The university took breaches of containment very seriously and the investigation would be very thorough, she said.

The Green Party says the release is a "massive wake up call to our environmental regulators".

"It's absolutely not acceptable that almost two weeks after this breach the ministry still doesn't know how it occurred," said genetic engineering spokesman Steffan Browning.

Introducing a robust, legal way for local government to manage the risks posed by outdoor use of genetically modified organisms (GMOs) is a step closer following a decision by Whangarei District Council’s District Living Committee.